Does anyone have experience purchasing a short-sale?

josie402 · May 2013

We have an offer in on a home that is a short sale. Ours is the only offer on the home, and they aren't taking any others. We've (finally) made it to the negotiator, and now they are saying the only amount they will accept is more than both the loan amount and the BPO. Is this normal? We have people who want to buy our home so we are trying to resolve this as quickly as possible. Our realtor is going to talk to the negotiator more later, but I would love to hear other experiences.

Thanks!!

R.Wilsonny · May 2013

The house my H & I bought was a short sale. Our process was a bit unusual though because the offer we put in was accepted and the BPO came back lower than our offer, so the seller's bank lowered the price for us to a tune of about 50k. So we made out with an even better deal than we originally thought we were getting.

Let me ask you this - does the house you guys are purchasing have 2 mortgages on the property? Apparently this is common in short sales and can hold up the process, especially if the mortgages are with 2 different banks because then you have to deal with 2 separate banks fighting over who gets what. Some banks are still in denial too about what a home is really worth - so they also tend to refuse to take less, even if the BPO is clearly saying 'this house is worth x amount'. Hopefully you guys can get it resolved quickly....how long have you been waiting to close on this house?

LoveKiss · May 2013

We had 2 failed short sales. The first one failed because the seller was uncooperative and didn't want to send stuff to the bank. The second one failed because the bank demanded the BPO amount, but the BPO itself was just plain wrong. So the bank demanded $500k, we made a final offer of $450k, the bank just stopped responding, and we walked away when our contract expired. The house finally sold almost a year after our failed negotiations for $410k. So not only did the bank not get the $500k they demanded based on the incorrect BPO, but they also left $40k on the table that we would have paid for the house a year earlier. Quite simply, banks are stupid. Very, very stupid. And illogical. And stupid. All you can do is stand your ground and believe that if this deal doesn't work out it is because there is an even better one just waiting for you.

R.Wilsonny · May 2013

LoveKiss:
We had 2 failed short sales. The first one failed because the seller was uncooperative and didn't want to send stuff to the bank. The second one failed because the bank demanded the BPO amount, but the BPO itself was just plain wrong. So the bank demanded $500k, we made a final offer of $450k, the bank just stopped responding, and we walked away when our contract expired. The house finally sold almost a year after our failed negotiations for $410k. So not only did the bank not get the $500k they demanded based on the incorrect BPO, but they also left $40k on the table that we would have paid for the house a year earlier. Quite simply, banks are stupid. Very, very stupid. And illogical. And stupid. All you can do is stand your ground and believe that if this deal doesn't work out it is because there is an even better one just waiting for you.

Ugh! That's annoying. In the end, when you found out how much that house sold for, did you think to yourself 'good - serves them right'. I sure would have. And in the end, did you wind up with an even better deal/better house?

There was another short sale that we considered buying, but in the end, were dealing with a ridiculous unrealistic realtor who was supposed to be working on our behalf, so we walked. And as far as I know, that house is still on the market almost 2 years later. Pfffft.

josie402 · May 2013

We put our offer in at the end of January. Things were moving well, then the mortgage was bought by another bank so it started over. When things were moving well back in March, we listed our house and found a buyer, but then the process started over and stalled.

There are two mortgages. We just aren't sure if the number they gave us includes both. From our understanding, it was only the main mortgage. We'll see...Our realtor is trying to get ahold of them to get some questions answered. Hopefully we can get something resolved somewhat quickly!

entropicbeauty · May 2013

My husband and I had an offer accepted on a short sale. About 2.5 months into the process we had to give up on it. The seller had accepted our offer immediately and took the house off the market, but when it got to the bank, the bank demanded MORE than the list price. It just wasn't worth what the bank was asking.

Banks are greedy and as a PP pointed out STUPID. They lose out on money in the long run because they think they can bully people into paying more.

I'm so very glad we walked away, now we are under contract and set to close by the end of May on a house that is significantly better.

R.Wilsonny · May 2013

Speaking of short sales, there's actually a few other ones that my H & I had looked at when we were on the market for a house. One of them has been under contract since last February and still hasn't closed. Two of the other ones we looked at were under contract for about the same amount of time and are now back on the market again, so who knows what the deal was with them (although one of the houses was seriously trashed and unliveable so anyone who buys it better have a lot of money to fix it). There was one other one that we were thinking to look at but then it went into contract before we had a chance to - this was last year as well and it still has not closed. I walk past this poor, and now dilapidated house every single morning on my walk to the train station and keep hoping that it closes soon and that whoever buys it restores it to it's former glory because the house is massive and has potential to be beautiful like all of the other homes in our village.

josie402 · May 2013

Thanks, I really appreciate everyone's input. This house would be perfect for us, once we got it cleaned up and repaired. If it was in good shape, we'd be willing to pay what they want, but since we'll have to drop a fair amount into repairs immediately, we can't pay as much.

I'm getting impatient waiting to hear back from our realtor! Smile

R.Wilsonny · May 2013

josie402:
Thanks, I really appreciate everyone's input. This house would be perfect for us, once we got it cleaned up and repaired. If it was in good shape, we'd be willing to pay what they want, but since we'll have to drop a fair amount into repairs immediately, we can't pay as much.
I'm getting impatient waiting to hear back from our realtor!

Well, that's the thing too....I would say most banks are just unreasonable - the market is slowly getting better, but it's still struggling and banks really need to realize this because their options are take whatever they can get, or have the house go into foreclosure and lose that much more money out of the deal.

Keep us posted though because I?m curious how this works out for you. Hopefully you won't have to wait too much longer and can get everything sorted with the bank and seal the deal. GL

josie402 · May 2013

Ok...I am so frustrated. When we began this process, our realtor told us that the home was already approved for a short sale. Now, the homeowner has been told that the bank won't accept a short sale. The reason they are asking higher than the BPO is to recoup past mortgages/taxes/etc. I really don't understand A) why it took them 4 months to realize that and

why we were told they were already approved. I am extremely frustrated with the bank and our realtor at this point. We told him the max that we can do, and he was going to talk to them one more time but it doesn't look like there's anyway it's going to go through.

R.Wilsonny · May 2013

Oh wow....that's such crap! Sorry to hear about this, especially since you guys have been waiting for 4 months to hear something. Our situation I think was kind of rare because the whole process went very quickly for us when we bought our house. Made offer and then closed within 2 months. A lot of people told my H & I that we were very lucky because most short sales drag on forever.

Anyway, I guess in the meantime while you are waiting again to hear from the realtor, just start looking again....who knows, maybe this is a blessing in disguise and you'll wind up finding something better. Oh yea, and since summer is just about here, now is generally a good time to look since new houses start popping up on the market. Good luck and keep us all posted - whether you wind up with this house or find something else.

josie402 · May 2013

Thanks! I'm glad that yours went well. Smile

We have been looking and will continue to do so. We were careful when we wrote our offer and added an option to back out if we found something else we liked, just in case it drug on for months. There haven't been any others we've really been interested in, but we'll keep looking! The good thing is that we don't have to move, we just would like to, so we're not on any kind of time crunch (and we're being really picky). The bad thing is that the people who had an offer in on our house (that we accepted contingent on this short sale working out) are going to be disappointed because they've been very anxious to get in here.

Does anyone have experience purchasing a short-sale?

Re: Does anyone have experience purchasing a short-sale?

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